If Stelco deal goes through, city recoups $9.6M in back taxes, fees
'Those numbers were built into the 2016 and 2017 budgets': City finance manager
The city of Hamilton expects to get about $9.6 million in back property taxes, fees and interest when a proposed sale of Stelco goes through.
There are still some hurdles for that deal to clear, namely labour agreements with the two union chapters representing workers and pensioners in Hamilton and Nanticoke, Ont.
But the city's moving forward on the understanding that when it does go through, it will recoup the money it's been missing out on since a judge ruled, in fall 2015, the company didn't have to keep paying its taxes while it worked out a restructuring plan under the Companies' Creditors Arrangement Act, begun in 2014.
Don't expect those amounts to be a sudden windfall for city coffers, which have been pinched lately.
"Those numbers were built into the 2016 and 2017 budgets," said the city's general finance manager, Mike Zegarac. "We continue to expect to realize those numbers."
About $2 million of the back taxes are monies the city would have collected on behalf of local school boards.
The Stelco deal gained some momentum last Wednesday when a group of salaried workers and retirees signed on to "an agreement in principle" with Bedrock, a company that is in exclusive talks to buy Stelco.
But the deal still needs buy-in from workers and from unsecured creditors.
Haldimand County is also owed back taxes from the company's operations in Nanticoke, Ont. Those would also be paid at the time the company is sold.
In December, Hamilton sent legal counsel to court in Toronto to formally object to being excluded from "any meaningful consultation and negotiation" about the deal with Bedrock, especially considering the city is owed back taxes and wants to weigh in on the sale of the waterfront lands contemplated as part of the deal.
But this week, Zegarac said the city was never really worried it would lose all its money owed.
He said the city's objection in December was to remind the company that the city wants to know about structures being proposed. And, he said, the city has a keen interest in "how any outcome might affect pensioners."
Last week, Local 1005 president Gary Howe said the retirees from the Hamilton plant are "up in arms" that their benefits continue to be held back by the company while it earns millions of dollars in steel-making.